National Party insider Michelle Boag acted as the support person for the ACC whistleblower during the pivotal meeting that has been referred to police.
Boag sat with her friend Bronwyn Pullar during a meeting in December in which the Auckland woman first told ACC there had been a privacy breach.
A report from ACC to its minister Judith Collins on Friday said Pullar threatened at that meeting to tell media of the privacy breach if she wasn't guaranteed two years on a benefit. The report said the corporation should have gone to police at the time; it referred the matter to police only on Tuesday.
Boag is a significant figure in National Party circles, having led as president in 2001 and 2002 the renewal process that brought Prime Minister John Key into Parliament.
Boag said it was important to realise a formal complaint had not been made to police. However, she told the Herald on Sunday: "I would be drawn into it. I was in that meeting."
Boag said her recollection of events was that it was the ACC staff member who suggested an arrangement could be reached in Pullar's case.
"In the meeting he said if we agree on this as a way forward, a condition would have to be that you return the information."
Boag said the staff member made the suggestion after she and Pullar urged an investigation of the privacy breach "for the sake of your ministry, your board, your CEO".
Boag said it was one of 45 privacy breaches of varying degrees of seriousness in the nine years Pullar had battled ACC since suffering a head injury in a bicycle accident.
The ACC report stated a letter had been sent to Pullar after the meeting that insisted the information be returned to ACC. According to Boag, there was more information in the letter - including the offer of a single year's benefit.
Boag detailed her recollection last week in an email to Collins, which was obtained by the Herald on Sunday. The email said it was "verbally agreed" the information would be returned "on agreement on the way forward".
It said the staff member had offered Pullar in writing "one year to re-establish her business". The staff member's written offer "asked for the return of the data (but) did not acknowledge that this would be contingent on reaching an agreement acceptable to both parties".
Boag said it was significant ACC staff did not warn its management or minister until after the breach became public. She wanted ACC to deal with the privacy breach internally and not as a public issue. "I am a supporter of this Government and I also call [former ACC minister] Nick Smith a friend. I don't want him embarrassed. I have friends on the ACC board. I do not want them embarrassed."
Boag said she was furious her letter had been leaked.
Collins confirmed she had received Boag's letter but sent it straight on to ACC. It would be included in the ongoing investigations into the security of ACC's privacy systems.